Drone has oscillations in Guided mode / Loiter mode when trying to hold position

I’m building an indoor visual navigation system. I simulate GPS using the Mavlink GPS_INPUT message. I send latitude, longitude and heading. On the ArduCopter, GPS_TYPE is set to 14 to receive the messages. ALT_HOLD works fine. When we switch to Guided mode, we get “toilet bowling” behavior. But the problem doesn’t seem to be the Heading input, afaict. It feels like PID settings for position hold, but I can’t be sure. (I’m fairly new to ArduCopter.)

From the logfile, is there an easy way to see what the problem might be?

Logfile: Logfile

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Hello, I’m facing the same issue, did you made any progress?